Donors stay in shadows as ‘dark money’ grows in politics

CHERRY HILL, N.J. — Just before Rhode Island voters chose their governor last year, a group in Ohio transferred $730,000 from secret donors to another Ohio organization that spent the money on television ads aimed at defeating Gina Raimondo, the Democrat who eventually won a tight race.

More than a year later, it’s still not clear where the money came from or why two Ohio-based groups would want to influence an election 600 miles away. The same groups also funneled anonymously donated cash for major political ad campaigns in Arkansas and Illinois.

understanding 'dark money'

Q. What is “dark money”?

A. It’s what critics call political spending by nonprofit groups that do not report the sources of their contributions. The money generally comes from nonprofits registered as social welfare organizations and goes toward independent spending rather than campaign coffers controlled by candidates. The federal government does not require those groups to disclose their individual donors, and neither do most states.

Q. How much of a factor is this kind of spending in elections?

A. It accounted for more than $300 million in the 2012 presidential and congressional elections, and is expected to play a significant role in 2016. An analysis of TV ad buys seeking to influence state-level campaigns in 2014, released by the Center for Public Integrity, found that $25 million was spent by groups that did not disclose their donors.

Q. What do courts say about this?

A. They had a role in creating it. The U.S. Supreme Court’s Citizens United ruling in 2010 found it unconstitutional to put limits on political spending by businesses, unions and nonprofit groups. That case and others have altered the democratic process, with political spending increasingly done by outside organizations rather than candidates or parties. The Citizens United ruling also encouraged prompt disclosure as a way to hold corporations and candidates accountable.

Rhode Island’s disclosure laws are tougher than most, but this was a classic case of “dark money” keeping its secrets despite requirements that donors who pay for political ads reveal themselves to the public.

With the presidency at stake in 2016 as well as a dozen governor’s races, 34 U.S. Senate races, all 435 seats in the U.S. House of Representatives and scores of mayoral races, state legislative seats and ballot initiatives, this kind of unlimited anonymous spending is expected to grow, and handling it has become the biggest campaign finance challenge for states nationwide.

Some legislatures are trying to collect and publish the sources of these donations, but most states allow independent groups to spend unlimited cash on political ads with little transparency.

At least one state, Wisconsin, is moving away from disclosure: Republican Gov. Scott Walker signed laws Wednesday that blur the lines between the activity of candidate campaigns and groups that – in almost all other states – are supposed to act independently.

This could set back democracy if other states follow suit, said John Pudner, the founder of Take Back Our Republic, a group based in Auburn, Alabama, that argues for tighter campaign finance laws from a conservative perspective.

“Disclosure is important and fair,” Pudner said. “If we want to get people away from their cynicism, let them know everything.”

In Maine, the state’s ethics commission staff is proposing new campaign finance requirements for organizations, including many from out of state, that funnel huge sums of money into Maine elections but are not required to disclose their donors.

The proposed changes, approved by the commission in October and forwarded to the Legislature for ratification, are designed to shed light on who is funding groups from all parts of the political spectrum that are playing an increasingly prominent role in hotly contested elections and ballot questions in Maine.

During the November 2014 election, for instance, five national groups spent or donated more than $13 million to sway voters on the race for governor and the referendum over bear hunting. Those groups are not required under current law to spell out the origins of that money.

The ethics commission staff is proposing legislation that would require political action committees and ballot question committees “whose primary focus is something other than influencing Maine elections” to report donor information if the organizations spend more than $5,000 on either candidate elections or referendums in Maine. The bill lays out a complex set of criteria for when disclosures would be required.

FUNNELED THROUGH NETWORKS

Political funding has been shifting to independent groups from individual campaigns since the U.S. Supreme Court’s 2010 Citizens United ruling, which removed caps on how much corporations, unions and interest groups can spend on advocacy communications that do not specifically call for the election or defeat of candidates.

The ruling explicitly encouraged transparency: “Prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters,” Justice Anthony Kennedy wrote.

But the federal government doesn’t require such disclosure, and most states don’t either. Even states that do have been stumped by webs of financing that obscure the sources.

Of $850 million spent on state-level, political broadcast-TV ads in 2014, $25 million – or about 4 percent – came from groups that do not have to disclose their donors, according to an analysis by the Center for Public Integrity of data from the advertising tracking firm Kantor Media/CMAG. That’s twice as much as in 2010, when a similar number of state offices were on ballots. In the 2012 congressional and presidential elections, dark money topped $300 million.

If last year’s mayor’s race in Newark, New Jersey, is any guide, anonymous cash will be a far bigger factor in 2016 races at all levels, nationwide. Independent spending dwarfed what the candidates’ authorized committees spent, and while much of it was duly reported as coming from unions, much also came from advocacy groups not required to identify individual donors. Most pays for television commercials, but it also funds automated calls to voters, fliers through the mail, and advertising in newspapers, radio and the Internet.

Denise Roth Barber, managing director of the Helena, Montana-based National Institute on Money In State Politics, calls it a “shell game,” with donors giving anonymously to one group that contributes to other organizations so that the original sources never appear on campaign finance filings.

GROUP ‘VIOLATING THE INTENT’

Rhode Island has required groups running advocacy ads to disclose top donors since 2012. The Mid America Fund complied by reporting that the Republican Governors’ Association provided some of the money for the ads in 2014, and that most of it came from another Ohio group, the Government Integrity Fund. The RGA discloses its donors. The Government Integrity Fund does not.

The spending – about half what each major party candidate spent during the last two months before Election Day – flooded Rhode Island’s solitary media market in the final two weeks with ads accusing Raimondo of “gambling with our retirement.”

The Rhode Island Democratic Party told the state elections board that the group should have disclosed its original donors. The board’s executive director, Robert Kando, told The Associated Press that the issue will be considered in January at the request of Common Cause, which has pushed for more donor disclosure around the country.

State Sen. Juan M. Pichardo, a Democrat who sponsored Rhode Island’s disclosure law, said that the group is “violating the intent and the law.”

Press Herald staff contributed to this report.

“It’s deceiving,” Pichardo said. “People should know where the money is coming from, what sort of influence and the intent is from the organization and the donors.”

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